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>> host: in july you spoke at carnegie mellon, and you talked a little bit about the regulatory process, the slowness of the process and the fcc's -- the way the fcc does business. i want to get your further thoughts on that and also get you to reflect on your first few months on the federal communications commission. >> guest: well, thank you for the question, and thanks again for having me. it's a privilege to be on the
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show. at carnegie mellon, one of the things i tried to identify was ways the sec could -- fcc could establish a communications technology to really be a leader in job creation and economic growth. it historically has been one of the most dynamic parts of the economy, but in recent years if you look at statistics from the labor department, job growth and economic growth has slowed. i identified three basic areas where i thought the fcc could do more with respect to the ict sector. number one, it was more internal. the fcc should act at the same pace as the industry that it regulates. one of the things i've heard from a number of companies is that the fcc has sometimes not acted with much alacrity with respect to issues that are pending before the commission or in delaying action on other issues. and so i wanted to think about different ways that the commission could speed up its
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processes. second, i think that one of the key things the commission can do and should do to enable more dynamic industry is to get more spectrum into the commercial marketplace. there have been a number of different proposals on the table, and i take an all of the above approach with respect to spectrum policy. and finally, i tried to think of different ways that the fcc could remove bieriers to -- barriers to infrastructure. for every billion thats that the private sector spends on fiber spectrum, jobs could be created. from a regulatory perspective, my goal is we should remove the barrier to make those risk and make those multibillion investment decisions. >> host: well, what is one of those barriers you think would be removed or mitigated? >> guest: i think the primary one is more conceptual in nature, and that is this: our telephone regulations were adopted largely in an era where
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you had voice communications traveling over copper wires, and those wires were operated by monopolies. and so those regulations were, basically, enacted at a time when you had a very different landscape than you have today. today there is a lot of different competition, intermodal competition where you have cable companies and wireless companies competing with the telephone companies to provide the same service. so in my view, the fcc should take a forward-thinking approach, look at more technologically neutral, less regulatory way of p thinking about some of these services. so when it comes to fiber deployment, for example, my view is we should not think of it in the same ways we thought about copper wire monopolies back in the '70s, we should think about competitive fiber providers across different industries. >> host: do you think your fellow four commissioners agree with your thought process?
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>> guest: i think it depends on the particular issue. there have been some issues where we've agreed and disagreed. i was heartened -- this doesn't relate to the fcc directly, but recently golf brown -- governor round in california focused on voip, voiceover ip in particular. that was a bipartisan group of republicans and democrats coming together to say we want to have innovation, and we want to incentivize investment in next generation networks. and the way to do that is to make sure that we don't apply those legacy regulations to those networks. >> host: well, joining our conversation is one of our regular guest reporters, eliza krigman of politico. >> thanks so much for having me, happy to be here. do you think that the telecommunication companies in a few years are going to be competitive with cable in wire line access? and if so, how are they going to do that without upgrading their
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networks? >> guest: i think they will be competitive. i think you've seen an increased amount of competition in recent years, and in last year alone communications companies spent $66 billion in infrastructure investment. that's a very substantial amount, and especially in the current economic climate i have to belief they wouldn't make such substantial investments if they didn't anticipate really making a slash in the competitive marketplace. >> so you're confident they will make the investments necessary to remain a direct competitor with cable. >> guest: they will with one caveat. they want to know that the rules of the road are going to be certain and predictablement so the extent that we at the fcc can do everything we can to make sure our regulatory framework gives them incentives to take those risks, then i think the answer is yes. >> one of the hottest topics in telecommunications right now is spectrum and the incentive auctions, and the fcc just moved forward last week with that
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process. if -- should one entity or one company be able to purchase all of the spectrum that's made available to this auction? >> guest: well, in my view we have to insure robust participation, and that applies not just to the participants in the reverse option, the television broadcasters, but also participation of the forward option which is the wireless broadband providers. i certainly am not of the view that the fcc should artificially limit who should participate, and we certainly want to make sure that as many wireless providers as possible participate in the forward auction. and so my view is as long as we, you know, make clear rules of the road and don't artificially limit, you know, spectrum holdings or other types of regulatory barriers, we will see robust participation. >> so define artificially limit. does that mean then that one person can purchase it all if they simply make the highest bid and there is robust participation? >> guest: well, our goal should
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be to insure that the spectrum that is reclaimed or relinquished is put to the highest value use, so the question is, what is the highest valued use? in the current environment, highest valued use is typically measured by who is the highest bidder at the auction. but one of the artificial limits that i was mentioning was setting a limit in particular markets, especially where certain providers can't hold more than x amount. and if that amount that we limit, where we set the limit is not based on, you know, particular facts identifying competitive realities in the marketplace, our -- that view could unintendedly, you know, limit how robust the spectrum auction could be. >> host: now, commissioner pai, one of the concerns from the broadcasters is, first of all, they don't have extra spectrum is one of their thoughts, and also the spectrum that they gave up earlier has not been put into use. are those fair concerns?
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>> guest: well, i think it is important for us to take into account those concerns, and one of the four principles that i outlined in my statement when we approved the order last friday is that whatever action the commission takes, it as to be fair to all stakeholders. and one of the principal stakeholrs in this context are the television broadcasters. and so we immediate to -- we need to take into account their concerns not with the spectrum they recent ri relinquished, but their concerns about the entire process. how would the repackaging process work, for example, how should they think about valuation of the spectrum that they hold? what should be the framework or what guidelines should they think about when it comes to channel sharing? those are a number of the concerns that we should listen to as we think about setting up the rules for the auction. >> host: what about looking at government-held spectrum as well? >> guest: that's another piece of the puzzle that i talked about repeatedly since i got to the fcc. it's a critical part to the extent that the federal goth by
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some -- federal government by some estimate krolls approximately 40% of the magnetic spectrum, and i think we need to think creatively about ways to facilitate the clearing and reallocation of spectrum in cases where it's not being used as efficiently. and to the extent that's not possible, i'm not opposed to innovative sharing strategies. >> host: do you think there's a better solution? do you -- is there a better solution than the spectrum auction to get spectrum out in the marketplace? >> guest: well, as i outlined in pittsburgh, i take an all of the above approach, so while the television broadcast spectrum is one critical part of the puzzle that, you know, could work to the benefit of consumers, it's not the only one. there are other bands that i've talked about where the commission could take action. it's either the national broadband plan two years ago set a ambitious thresholds for action by the commission in terms of spectrum, freeing up
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300 megahertz of spectrum by 2015 and 500 megahertz by 2020. some of the 300 megahertz identified for reallocation by 2015 are still on the table. the aws4 spectrum, for example, the wcs spectrum that we're going to be voting on later this month. so i'm excited that the commission will have an opportunity to take a look at all possible solutions to this problem. >> host: well, and one of the other issues regarding spectrum is that lightsquared has made a new proposal. what do you think about lightsquared and its chances of getting that proposal approvedsome. >> guest: i have seen, you know, obviously, trade reports about the lightsquared proposal. i've not had the opportunity to read the particular filings that it's made and any comments on those filings, but i certainly look forward to digging into the record and making the appropriate judgment. >> guest: on lightsquared, though, give us a sense about the feeling at the commission.
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it's been a political saga that's taken up much of the discussion about spectrum over the past year and a half. are you optimistic that there can be a path forward for them, or is this just sort of a last ditch attempt to keep their debtors away? >> guest: unfortunately, i hesitate to opine to the extent that i haven't had an opportunity to look at the filings, as i mentioned, or to talk to my colleagues. some of my colleagues who were here for some time during lightsquared's previous proceedings. we just haven't had a chance to discuss it, so i can't really forecast where that will end up. >> fair enough. on another spectrum issue, right now there's a lot of tension between the administration and industry over to what with extent spectrum exhaust can be addressed by sharing. is the p cast report wishful thinking, or is it wishful thinking for industry to think they're going to get clear swaths at this point in time? >> >> guest: i am certainly not opposed to innovative strategies that would facilitate sharing.
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to the extent that certain federal users are unable or unhandgun to relinquish the spectrum and get it cleared, if sharing is all we have left and there is a definable strategy for doing it that's technologically feasible and can be done within a certain time frame, i'm in favor of it. in my view our principal goal should be to clear and reallocate the spectrum. and the reason is from a commercial standpoint, you're able to make much more advanced plans about how to use that spectrum on the commercial side if you have an unencumbered property right to it. if there's a federal user that could preempt you in certain situations or in certain geographic areas, then the value of that spectrum goes down because you're not quite sure how to deploy anytime the most efficient way possible. so clearing, in my view, should be the focus. >> does the fcc have its work cut out for its with -- for it with the administration? >> guest: i've certainly made that statement, and i've worked
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with some of my colleagues to make sure that happens. >> host: commissioner pai, there's another issue that the fcc is looking at this week, and that's the exclue sift ban. last week on "the communicators" david cohen of comcast was our guest. here's what he had to say about the ban. >> guest: i think the chairman's order as you describe it, um, is the appropriate course of action to take. um, you know, and that's been comcast's position in the proceeding. um, life is long. as you note, our order lasts until 2018, and so for whatever it applies to over that period of time it applies to, but of after that period of time we should be treated like everybody else. and, again, if people believe that it is appropriate for the exclusivity ban to continue, they need to go back to congress and to get different legislation than the legislation that exists
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now, because the current legislation simply does not support the exclusivity ban in the current competitive posture of the marketplace. >> so what happens when october 5th rolls around and it expires presumably? do we suddenly see several exclusive contracts out there? >> guest: i don't think so. i think the fears have been overstated, but i obviously don't know for sure. >> host: what's your reaction to what mr. cohen had to say and to the exclusivity ban? >> guest: well, i guess starting from the very general premise, my view is that our regulations should take into account the current state of the marketplace. congress, when it enacted this provision, instructed the commission to continue it based upon an assessment of where things stood in the market at that point. we are now at that point because the exclusivity ban is scheduled to expire on friday, and so one of the things the commission has been wrestling with is does this prohibition continue to be necessary in the interest of competition? one of the things i have been
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working with my colleagues on and we've been having many meetings with people on the outside on is how do we think about competition in this marketplace? does the ban continue to be necessary? and so we've heard it from a variety of people who advance a variety of perspectives on that question. my own view is that the rules should generally and with respect to this particular instance have to keep track of and have to be consistent with the current realities in the marketplace. >> host: and the current realities are that it should expire? is. >> guest: that is certainly what has been proposed and without giving too much of a forecast of where things are going to end up, i think there is a general consensus based upon, in part, the d.c. circuit's recent decision a few years ago that competition in this area has changed compared to where it was in 1992. >> host: congressman markey recently sent a letter to the fcc asking that it be retained because he says it will stifle competition, lead to higher prices. >> guest: yes.
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there's certainly debates on, worthwhile perspectives on both sides of this question. he has, as one of the people who helped author this provision, he has advanced that perspective. on the other side of the ledger, folks have argued if you let the ban expire, that increases the incentive for competitors to make their own investments in certain kinds of programming. there's also been the argument that the ban could help promote more competition by making distributers, giving them heightened incentive to distribute the programming. >> host: prior to being appointed to the federal communications commission, ajit pai served as deputy counsel at the fcc. he also worked at verizon. he is a graduate of harvard and law degree from the university of chicago. eliza krigman of "politico," next question. >> yes, a very impressive background for this position. since you have worked as verizon communications, have you been lobbied by any of the people
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that you used to work with? >> guest: i have not, no. >> okay. on that same topic, i'd like to ask is the fcc supposed to operate in the public interest, but the reality of the matter is most of the people who comment on the public record are the well-heeled lobbyists, and that's who the commission also spends a lot of time meeting with. what are you going to do personally to make sure your opinion's informed by the average consumer? >> guest: at my confirmation hearing in november of last year, i stated i would hold no favor for or prejudice against any particular company, person or segment of the industry. and i would like to think that in the four-and-a-half months that i've had the privilege of serving at the fcc that i've stayed true to that. i've taken literally hundreds of meetings, some of them have been with representatives of different companies whom we regulate, but a number have been with public interest groups, even individuals. and when i go outside of washington to visit various places, i make a point of
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visiting citizens who are not involved in the communications industry, but are directly affected by the decisions that we make. and one of those trips i took recently was to my hometown of parsons, kansas, where i heard from citizens about different communications issues that affected them. so i think that's a good way to stay grounded, as it were. you know, because i think it's often too easy to think about these things as abstraction on a page as opposed to real issues that effect real people. >> i'm glad you mentioned kansas, actually. in a statement after you visited there, you wrote that too many providers who try to obtain such access are confronted with don't think that the state and municipal regulations with respect to the google fiber project there. aside from municipalities that are banned from creating such networks, can you name some examples of providers who have tried to do the same and haven't been able to because of that? >> guest: one example is at&t.
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they tried to introduce u-verse in the city of san francisco, and it took several years for them to get the approvals to roll out this video service. and i mention that in particular because video is one area where there has been a lot of talk about the need for increased competition. here you have a tradition call telecommunications provider trying to enter the marketplace to provide video, and in my view municipalities and state governments and the federal government should do everything it can to reduce those barriers to make sure we don't stand in the way of more competition. >> david cohen on his episode of "the communicators" said that he budget concerned about google fiber being a competitive threat because he doesn't think that google or anybody else simply has the money to be able to invest in it across the country. do you think that's a problem we're facing, that there isn't enough capital to make that investment? >> guest: um, from my vantage point i can't say whether or not there's enough capital.
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what i can say is many companies have told me that they are sitting on billions of dollars on their balance sheepts in part because of -- sheets in the part because of regulatory uncertainty. they are going to be hesitant to make those significant investments in fiber deployment or, you know, internet infrastructure because it's not worth taking the risk if the rules might change after that decision is made. >> it's been a priority of chairman genachowski's to clear some of the red tape you're talking about. is there something that he's not doing right, and what should change in order to make this happen? >> guest: well, i think there's several things the commission could do. first and foremost, i would argue, is what i said earlier, making sure we don't expand or extend the legacy regulations developed in the monopoly era to next generation networks. that's a very simple concept that has broad application across a number of different areas. one of them, for example u is the title ii docket which remains open to this day.
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now, to the extent that we wanted to send a signal to the private sector that we were not going to take a heavy-handed regulatory approach to infrastructure investment, we could close that docket and let the private sector know that reclassification of, you know, internet services and other services as telecom services under title ii would be off the table. but we haven't done that. it's a very simple, symbolic step, but it could go a long way, i think, to sending the right message. >> host: ajit pai, one of the issues you worked on at verizon and at the fcc was broadband policy. in your view has the national broadband plan been a successful one? >> guest: i think that the broadband plan identified a number of worthwhile goals. spectrum is one example as we discussed earlier. i think the key is for the fcc to be more expeditious in taking the necessary steps to meeting those goals. and so when it comes to spectrum, we should aggressively target each of the areas
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identified in the national broadband plan, and then we should do everything we can to make sure the commission takes action as quickly as we can. i'm hopeful between working with the chairman and my fellow commissioners, we can make that a reality sooner rather than later. >> host: would you supportive if that wanted to be built out further or if more money were expended toward that? >> guest: toward -- >> host: furthering the broadband plan if there was such a proposal? >> guest: it depends on the specifics of the proposal, but in general i stand with my colleagues in wanting to make sure that we have broadband deployment across the country. >> host: and you've mentioned a couple times that you don't want to see regulation in copper wire era today. there's been talk from time to time about revisiting some of the major telecommunications acts. is it, are we to a point, in your view, that telephony and cable and broadband and mobile are all such separate issues anymore that they can't be
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lumped into one telecommunications act, or would you like to see congress move forward on updating some of the telecommunications laws? >> guest: one thing that i think everybody agrees on in this field, regardless of what particular position one might take, is that conversions is a reality. as you suggested in your question, we now have cable companies providing telephone service. we have telephone companies providing video service. we have wireless companies competing with each of them. we have satellite companies now providing broadband and other advanced services. and in that context where convergence is a reality, not just an abstraction, it becomes difficult for the fcc -- which is charged with administering the communications act -- to apply some of the principles of that act to an industry where you have convergence. so it doesn't make sense to have telecommunications services regulated under title ii. it doesn't make sense to have wireless services under title iii, cable services regulated
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under title vi. in circumstances where regulatees are competing with each other to provide the same services. that is a very difficult question, and i wish there were something we could do from the fcc's perspective to make that transition an easier one. but the question lies in the first instance within the discretion of congress. and so should congress see fit to revisit the act, i stand to be a willing partner in that effort. >> republicans talk a lot about what the fcc shouldn't do. aside from repealing regulations, where should the fcc take action? >> guest: in terms of substantive areas or procedurally or -- >> substantive areas and also procedurally. >> guest: well, let me tackle the first one first because it is an apolitical position that i've taken on this which is that the agency should act with more dispatch. i've advanced a number of proposals that would allow the agency to respond more quickly to people on the outside who have asked for our guidance.
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a very simple one is setting deadlines. we often don't have any kidlines for -- deadlines or for acting on petitions for consideration or applications for review, for example. these are sort of around phrases, but essentially this -- arcane phrases, but essentially this requires the commission to reconsider an earlier decision made by ourselves or by one of our subordinate bureaus. quite often a review will sit at the commission for years in some cases without any decision. in fact, very recently at a house hearing we were asked about one application review pending since, i believe, 999. so by setting a deadline, the commission could insure that we would take, make some decision within a certain time frame, and that does not just a good service to the parties to that proceeding, but it does a good service to the public because the public will know that the commission is responding reasonably. it's not just sitting on an issue. from a substance standpoint,
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too, i think there are a lot of things we could do, infrastructure investments, media ownership, we could update our rules to better account for changes in the marketplace that have taken place in some cases since 1995 when our rules were adopted. >> specifically, you propose an office of entrepreneurial innovation to speed up the fcc approving or denying technology. has that gotten any traction inside the agency with lawmaker, and would you need legislation to make that happen, or could the agency just do it? >> guest: the agency could implement that proposal. it's an internal organizational proposal, so we could do it if we wished. i've gotten favorable feedback from a number of different people. i haven't spoken with all of my colleagues about it, but i think in general they share my view that we should do everything we can to promote entrepreneurship and innovation. and to the extent that this office could shine a spotlight on that, and especially enforce section 7 of the communications
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act which is what i often like to think of as one of the forgotten sections, to act on a proposal for new technology or service within one year of its proposal. that is something i think we could do that would really send a strong message to the private sector that we want to work with you to make sure you are able to provide the most cutting edge effort effort services to the american public. >> do you think the fcc needs more personnel to enact this office? >> guest: no. we have an existing office that i believe could be repurposed along with expert staff from our engineering office, so i don't think we would need any additional personnel or money to do et. >> host: ajit pai, as we tape this today, it was announced that there's a potential merger between deutsche telecom and metro pcs. what are your general thoughts? i'm sure you won't comment exactly on that merger, but what are your general thoughts on such a merger, and how would you
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have voted on the deutsche/at&t merger? >> guest: so on the second question i, i'm hesitant to express an opinion not having had the benefit of reading the filings, meeting with the interested parties. as you know, i was a nominee during the the penty si of some of that, so i didn't have a chance from a commissioner's standpoint to really dig into those issues. with respect to the proposed merger that has been announced today, that's something that i think we should look at very carefully. i've advanced in the past my view that the commission should review and resolve any, its rook at those transactions within 180 days if not sooner. and it's my hope that we will do that -- >> host: what would hold up 180 days, what would make it go longersome. >> guest: in some cases in the past the department of justice and/or the federal communications commission has expressed concerns about the
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competitive implications of a particular transaction, and so i suppose that's something that could happen in the context of any transaction. but my hope is that six months should be more than enough to review any of these transactions. >> according to your twitter feed, and you're a relatively prolific tweeter -- [laughter] you met with metropcs on september 19th. did they talk with you about these plans for this merger? >> guest: no, they did not. >> really? [laughter] >> guest: no, i promise you. it was an interesting chance to hear from them how they got off the ground, and it's one of the success stories where an innovator had an idea and started it with two of his friends literal hi in a room about this size, and they've grown into one of the nation's biggest wireless companies. >> host: you've also been out in silicon valley and been meeting with different companies out there. recent article in the "wall street journal" about f
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